< meta name="DC.Date.Valid.End" content="20050825"> Amendment Nine: Property Derivatives, Leveraged Loan CDS, and more.

Friday, May 13, 2005

Property Derivatives, Leveraged Loan CDS, and more.

According to the Evening Standard (sorry, no links today - just print) ICAP is setting up a commercial property derivatives team and they'll be pitching to pension and hedgies soon enough. We think the market for property derivatives will explode over the next few years. Good move.

FT reports Morgan Stanley is unveiling a "new" (funny) credit default swap instrument based on leveraged loans (start at 25 - 30% most actives; Europe). Lets you buy protection on risk exposure to leveraged loans, and lets me bet on which loans will default first. I'm there.

In another interesting article from FT, Morgan Stanley calculates total value of CDOs sold since 2004 as $131B. They then adjust for credit risk, and get a real value of $350B. Thats it? Whats the problelm guys. 3x levered ain't bad!

See you at the break.